Is Alpha becoming Beta?
That seems to be the case lately, with a very high correlation between stocks.The WSJ noted the sync between individual names in Component Stocks’ Correlation to S&P 500 at Highest Level Since ‘87 Crash.
Hence, it is not really a “stock pickers market,” as so many know-nothing pundits are trying to tell you.
Jim Bianco blames “Macro Investing” — between ETFs, program trading, and other factors, this leads to increasing degrees of correlation.
I think its more of a sign of indecision, and traders sitting on their hands.
Here is Jim’s chart, showing the correlation between 6 other markets that are trading like SPX:
click for bigger chart
chart courtesy of Bianco Research
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.